The management consultants McKinsey said last week that British management and workers were vastly underperforming compared to their competitors - and the Chancellor of the Exchequer Gordon Brown spoke repeatedly of the "productivity challenge" in his pre-Budget statement on Tuesday.

But Paul Butcher, Managing Director of Mitel Telecom, told delegates at Telework World 98 that his company had seen huge productivity gains since 75% of its workforce was equipped for out-of-office working. He added that all of his staff would be teleworkers by 2001.

Teleworking not government or company policy

Little was being done to encourage teleworking by either the government or companies in general, he said. He quoted from a poll conducted by the market research firm MORI on behalf of Mitel. It suggested that lack of support from bosses was the main issue preventing individuals from teleworking.

Two-thirds of non-teleworkers said the primary reason for them not working out of the office was that it was not company policy.

Mr Butcher said the government also had to introduce tax incentives to encourage teleworking and/or legislation which would require businesses to have at least 10% of their employees working from home.

"Although the government has made some extremely positive statements about teleworking, they are nothing more than aspiration. The reality is very different and the government has proposed no specific measures to encourage the nation to 'work down the wire'," he said.

"Furthermore, its recent White Paper on transport fails to grasp the fundamental change that has taken place in the way we work - for a great many tasks we do today, our presence in a particular location is no longer essential."

Peter Thomson, Chairman of the Henley Future Work Forum and organiser of the conference, said government needed to co-ordinate more between different departments;

"For example, the Transport White Paper was very good at trying to move people off the roads onto public transport but not very good at getting people off commuting altogether," he said.

"The Employment Department can clearly see some benefits for employment but it's clearly not top of their agenda. The DTI (Department of Trade and Industry) to be fair have been pushing it quite hard."

Working anywhere promoted

DTI minister Barbara Roche opened the conference and announced the publication of a booklet, Working Anywhere, to help business weigh up the opportunities presented by teleworking. She said it had been prepared with the help of 13 government departments and agencies and 25 other organisations had been consulted.

"Companies must begin to think in terms of information flow and working by results, rather than judging work done by the simple presence of someone in the workplace," she said.

"The flexibility offered by teleworking can also help employees strike the right balance between work and home, complementing the Government's other family-friendly policies."

Paul Butcher said the flexibility of teleworking gave employees a better quality of life. Staff turnover at Mitel was a third less than the norm. Staff levels had increased by 15% and yet four offices had been closed and millions of pounds had been saved.

He warned that Britain risked falling behind countries such as Holland and the US, where business had realised the benefits of out-of-office working. There are currently 1.28 million teleworkers in the UK, less than 4% of the workforce, compared to 13 million or nearly 10% in America.

Peter Thomson said the key word for the future was flexibility. "We're not going to suddenly see massive numbers of people working from home instead of going into the office," he said.

"What we are going to see is people adapting work life to better suit their whole life and good employers recognising that they actually have a whole person and not just somebody they own from nine to five.

"Consequently you'll see a much more hybrid existence where people are in the office some of the time, maybe at a shared desk, and at home maybe some of the time. And there are of course telecentres, serviced offices, which are providing an intermediate stage where people can find a local office instead of having to commute into a town or city centre."